But leading utility companies, including Iberdrola and Endesa, have hit back by complaining that their gas and coal plants are losing money because they are needed much less frequently.

They claim they have been forced to fork out 20 billion euros to subsidise solar and wind projects and have urged the government to limit the number of subsidised renewable projects being built.

There is no indication yet of when the government will pay the companies back, with credit rating agencies threatening to downgrade the companies if something is not done to address the ‘tariff deficit’.

Last year the solar industry received 2.6 billion euros in subsidies, with solar projects last summer providing up to four per cent of the country’s electricity.

The phenomenal growth of the solar industry, since subsidies were introduced in 2004, has left Spain with 10 times the amount of solar pv capacity the government had planned for by 2010.

The cuts could have long lasting repercussions, with investors reluctant to back new projects while many existing ones could go out of business.

3 COMMENTS

The tragedy of all this is that solar heated water systems are absolutely proven to be the most cost effective way to obtain hot water more especially so in southern Spain.

20 years ago it could have been built into the building regs that all properties had to have at least one due south roof space to incorporate an SHW – oh I forgot there are no building regs. silly me they only apply to northern Europe/Scandinavia.

Solar hot water yes, but solar electricity and wind electricity, need a back up of conventional power stations, of equivalent output, for night time and for all the days when the wind is not blowing, which corresponds very often to the coldest spells over the winter. The whole thing is an elaborate government scam, and the massive subsidies have clouded the issue.

Voted Spain‘s number one expat newspaper and second in the world, by 27,000 people polled by UK marketing group Tesca.
“The best English newspaper in southern Spain,” according to the Rough Guide. The Olive Press is the English language newspaper for Andalucia. Local news from Costa del Sol and inland Andalucia plus national news from around Spain. A campaigning, community newspaper, the Olive Press represents the huge and growing expatriate community in southern Spain – 230,000 copies distributed monthly (160,000 digital impressions) with an estimated readership, including the website, of more than 500,000 people a month.